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You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Byrne (a minor) v The Motor Insurers Bureau Secretary of State for Transport [2007] EWHC 1268 (QB) (05 June 2007) URL: https://www.bailii.org/ew/cases/EWHC/QB/2007/1268.html Cite as: [2007] Eu LR 739, [2007] 3 CMLR 15, [2008] RTR 1, [2008] Lloyd's Rep IR 61, [2007] EWHC 1268 (QB), [2007] PIQR P25, [2007] 3 All ER 499, [2008] 2 WLR 234 |
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QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL |
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B e f o r e :
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BEN BYRNE (a minor by his litigation friend, Julie Byrne) |
Claimant |
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- and - |
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THE MOTOR INSURERS BUREAU THE SECRETARY OF STATE FOR TRANSPORT |
Defendants |
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Mr Dermod O'Brien QC and Mr Fergus Randolph (instructed by Greenwoods) for the 1st Defendant
Mr Jonathan Crow QC, Ms Jemima Stratford and Mr David Barr (instructed by Treasury Solicitor) for the 2nd Defendant
Hearing dates: 15 and 16 May 2007
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Crown Copyright ©
Mr Justice Flaux:
Introduction and background
"…this Agreement applies to any case in which an application is made to MIB for a payment in respect of the death of or bodily injury to any person caused by or arising out of the use of a motor vehicle on a road in Great Britain and the case is one in which the following conditions are fulfilled, that is to say-
…
(c) the death or injury was caused in such circumstances that on the balance of probabilities the untraced person would be liable to pay damages to the applicant in respect of the death or injury;
…
(f) the application is made in writing within three years from the date of the event giving rise to the death or injury."
The preliminary issues
"1. On the true construction of Directive 84/5/EEC and/or by reason of the European Community principle of equivalence, must the making of a claim for compensation in respect of injury caused by an untraced driver under the national provisions implementing, and/or relied upon by the Member State as implementing, Article 1(4) of Directive 84/5/EEC be subject to a limitation period no less favourable than that which applies to the commencement of actions in the courts in respect of claims brought by minors for personal injury in tort against a traced driver?
2. If the answer to Question 1 is yes, must the contract between the First and the Second Defendants namely the Untraced Drivers Agreement 1972 whereby the First Defendant undertook to provide compensation under specified terms for persons injured by untraced drivers, and under which the Claimant made a claim for compensation be construed so as to give effect to Article 1(4) of Directive 84/5/EEC and/or the European Community principle of equivalence?
3. If the answer to Question 1 is Yes and the answer to Question 2 is No, does European Community law impose a directly effective obligation on the First Defendant to provide compensation to a minor who makes a claim that falls within Article 1(4) of Directive 84/5/EEC later than three years after the accident which gives rise to such a claim but within three years from the date at which he attained his majority?
4. If the answer to Question 3 is No, is the United Kingdom in sufficiently serious breach of its Community law obligations under Article 1(4) of Directive 84/5/EEC and/or the principle of equivalence; and did the breach cause loss to the Claimant such as to entitle the Claimant to damages against the Second Defendant?"
The first issue
"Each Member State shall set up or authorize a body with the task of providing compensation, at least up to the limits of the insurance obligation for damage to property or personal injuries caused by an unidentified vehicle or a vehicle for which the insurance obligation provided for in paragraph 1 has not been satisfied. This provision shall be without prejudice to the right of the Member States to regard compensation by that body as subsidiary or non-subsidiary and the right to make provision for the settlement of claims between that body and the person or persons responsible for the accident and other insurers or social security bodies required to compensate the victim in respect of the same accident.
The victim may in any case apply directly to the body which, on the basis of information provided at its request by the victim, shall be obliged to give him a reasoned reply regarding the payment of any compensation.
However, Member States may exclude the payment of compensation by that body in the event of damage to property by an unidentified vehicle.
They may also authorize, in the case of damage to property caused by an uninsured vehicle an excess of not more than 500 ECU for which the victim may be responsible.
Furthermore, each Member State shall apply its laws, regulations and administrative provisions to the payment of compensation by this body, without prejudice to any other practice which is more favourable to the victim."
"The questions referred to the Court, which it is appropriate to consider together, raise a number of problems concerning the nature of the body which the Member States are required to establish in order to implement the Second Directive (fourth question), the remedies which must be available to victims of damage or injury caused by unidentified vehicles or vehicles for which the insurance obligation has not been satisfied (hereinafter insufficiently insured vehicles) (third and fourth questions), the need to provide for interest to be payable on sums paid to victims by the abovementioned body (first question), the need to provide for reimbursement of costs incurred by victims pursuing claims for compensation (second question) and the possible liability of the Member State concerned for failure to transpose the Second Directive correctly (fifth question)."
"It is thus clear that the Community legislature's intention was to entitle victims of damage or injury caused by unidentified or insufficiently insured vehicles to protection equivalent to, and as effective as, that available to persons injured by identified and insured vehicles."
"It is settled case-law that in the absence of Community rules governing the matter it is for the domestic legal system of each Member State to designate the courts and tribunals having jurisdiction and to lay down the detailed procedural rules governing actions for safeguarding rights which individuals derive from Community law, provided, however, that such rules are not less favourable than those governing similar domestic actions (the principle of equivalence) and do not render virtually impossible or excessively difficult the exercise of rights conferred by Community law (the principle of effectiveness) (see, in particular, Case C-120/97 Upjohn [1999] ECR I-223, paragraph 32)."
"The essential matter here is that moneys have not been paid to the trustees of a pension fund to purchase pension rights on eventual retirement or on reaching the prescribed age. A successful claim under article 119 obtains retroactively full access to the scheme so that the necessary contributions to obtain the appropriate pension rights for that individual have to be paid. A claim in contract would be for damages for the failure to pay those sums to the trustees leading to a total or in some cases a partial loss of the pension rights. In form they are plainly different but in substance the eventual benefit to the employee is sufficiently similar for present purposes. To adopt the words of the Court of Justice [2001] 2 AC 415, 451F-G, para 57 the "right of action available under domestic law is a domestic action similar to proceedings to give rights conferred by article 119 of the Treaty …" This is so whether the contractual term is express, implied or imposed by statute."
"Two principles can be drawn from this part of the judgment [of the European Court in Palmisani v INPS [1997] ECR I-4025]. First, the principle of "equivalence" really does mean what it says. The domestic court, in applying the principle, must look not merely for a domestic action that is similar to the claim asserting Community rights, but for one that is in juristic structure very close to the Community claim. It does that, in the words of the Court of Justice in Case C-326/96, Levez, [1999] IRLR 36 at paragraph 43, by considering "the purpose and the essential characteristics of allegedly similar domestic actions". That approach was demonstrated in Palmisani by the rejection of a claim for specific payments, as opposed to compensation, as a relevant comparison. It was also demonstrated by the need to find in the domestic law not merely a cause of action for reparation, but one for reparation for conduct of a public authority in the exercise of its powers. The narrowness of that comparison was underlined by Mr Advocate General Cosmas in paragraphs 38 and 39 of his opinion:
"38. The claim in this case is for reparation on the ground that Directive 80/987 was not transposed into Italian law within the prescribed period, and as a result the persons concerned could not obtain the benefit of the guarantee provided for by the Directive at the proper time. Only the national court is in a position to know what similar claim may exist under the Italian legal system.
39. If, however, it were necessary to provide the national court with some element of comparison, it would in my opinion be the non-contractual liability of the State arising from belated adoption of a regulatory act provided for by an enabling statute."
Second, as paragraph 39 of the judgment of the Court of Justice in that case makes clear, if there is no action in the domestic system that fulfils the requirements set out above, then the national system is at liberty (subject always to the further principle of effectiveness) to set whatever limitation period seems best to it for the claim in relation to Community rights."
The second issue
"For my part I do not accept that the Marleasing principle has any application to the agreement. The Marleasing principle applies to the interpretation of national law and puts an obligation on the courts to interpret national law in the light of community law. It is not authority for the proposition that an agreement between a national government and another person must as a matter of community law be interpreted in such a manner that the state has fulfilled all its obligations under community law. Such a proposition seems to me wrong in principle when applied to agreements. The agreement can not in my judgment be properly categorised as part of national law. The state was at liberty to fulfil its community obligations in any way it liked and the fact that it chose to do nothing because it thought that the existing agreement by chance achieved fulfilment of those obligations can not provide a basis for concluding that the other party to the existing agreement should be bound to a particular interpretation resulting solely from the State's view of its effect."
"The argument on behalf of White (and to some extent Evans), as explained by Schiemann LJ sought to invoke a rather different principle relating to the construction of national measures; I agree that this argument does not assist the plaintiffs (or Evans). Similarly the fact that the Secretary of State may have made a mistake as to the obligations of the United Kingdom under the second Directive does not alter the position that, as a matter of contract law, the obligations and liabilities of the Bureau are those which it accepted and assumed under the Agreement and no more."
"34. The fact that the source of the obligation of the body in question lies in an agreement concluded between it and a public authority is immaterial, provided that that agreement is interpreted and applied as obliging that body to provide victims with the compensation guaranteed to them by the Second Directive and as enabling victims to address themselves directly to the body responsible for providing such compensation.
35. As to whether it is sufficient, for the purposes of transposing the Second Directive, to rely on an existing body, it must be borne in mind that, whilst legislative action on the part of each Member State is not necessarily required in order to implement a directive, it is essential for national law to guarantee that the national authorities will effectively apply the directive in full, that the legal position under national law should be sufficiently precise and clear and that individuals are made fully aware of all their rights and, where appropriate, may rely on them before the national courts (Case C-365/93 Commission v Greece [1995] ECR I-499 paragraph 9, and Case C-144/99 Commission v Netherlands [2001] ECR I-3541, paragraph 17).
36. As the Court has already made clear, the last-mentioned condition is of particular importance where the directive in question is intended to accord rights to nationals of other Member States (Commission v Greece, cited above, paragraph 9, and Commission v Netherlands, cited above, paragraph 18). That is the position in relation to the Second Directive, which is intended in particular, according to the fifth recital in its preamble, to guarantee victims adequate protection, irrespective of the Member State in which the accident occurred.
37. In those circumstances, it must be held that a body may be regarded as authorised by a Member State within the meaning of Article 1(4) of the Second Directive where its obligation to provide compensation to victims of damage or injury caused by unidentified or insufficiently insured vehicles derives from an agreement concluded between that body and a public authority of the Member State, provided that the agreement is interpreted and applied as obliging the body to provide victims with the compensation guaranteed to them by the Second Directive and provided that victims may apply directly to that body."
The third issue
i) that the Second Directive is capable of having direct effect in that the provision relied upon is "unconditional and sufficiently precise", the prescribed period for implementation has passed and the Directive has not been correctly implemented by the Member State;
ii) that even if the Claimant establishes that the Directive is capable of having direct effect, the MIB is an emanation of the state within the meaning of that concept as a matter of Community law.
"The judges below in the present cases took the view that since the MIB had in effect been nominated by the State to carry out the task of compensating those injured persons who could not look to an insurance company therefore the Directive could be regarded as having direct effect. Here, as it seemed to me, they erred. Whether a Directive has direct effect or not can not logically depend on what has been done in a particular Member State. I regard that as acte clair.
In the present case it was, at the time when the Directive came into force, open to the Government to fulfil its obligations thereunder in any way that it pleased whether by using the MIB or in some other way. In those circumstances it does not seem to me that the doctrine of vertical effect comes into play."
"[an] individual must be allowed to rely on provisions conferring on him in a precise and unconditional way the status of beneficiary of a directive once the discretion given to a Member State with regard to other provisions of the directive, whose non-implementation was the only obstacle to the effective exercise of the right invested in the individual by the directive, has been fully used."
"The Bureau is not constitutionally an emanation of the state: it is a private law company. It is not functionally an emanation of the state: it acts on its own behalf in the commercial interest of its members not on behalf of the state or as a delegate of the state. It enters into commercial private law contracts with inter alia the Secretary of State. Similarly, when seeking to implement the second Directive in relation to uninsured drivers the Secretary of State chose to make use of the same private law mechanisms as before.
The only capacity in which the Bureau has acted is as a private law entity and the only obligations it has assumed have been private law contractual obligations. This cannot be said to be a situation where any public law relationship has come into existence. Therefore the argument of the plaintiffs/claimants fails on the character of the relationship."
The fourth issue
"The factors which the competent court may take into consideration include the clarity and precision of the rule breached; the measure of discretion left by the rule to a national or Community authorities; whether the infringement and the damage caused was intentional or involuntary; whether any error of law was excusable or inexcusable; the fact that the position taken by a Community institution may have contributed towards the omission, and the adoption or retention of national measures or practices contrary to Community law."
"More recent cases show the working out of these rules. Thus in Reg. v. H.M. Treasury, Ex parte British Telecommunications Plc. (Case C-392-93) [1996] QB 615 the Court held that where the interpretation adopted by the United Kingdom was arguable on the basis of an imprecisely worded article of the relevant directive and where there was no case law to give guidance the state was not liable in damages. In Reg. v. Ministry of Agriculture, Fisheries and Food, Ex parte Hedley Lomas (Ireland) Ltd. (Case C-5/94) [1997] QB 139 where there was no or very little room for discretion in granting a licence that could in itself be a sufficiently serious breach. In Dillenkofer v. Federal Republic of Germany (Case C-178/94) [1997] QB 259 it was held that a failure to implement a directive, where no or little question of legislative choice was involved, the mere infringement may constitute a sufficiently serious breach. In Denkavit Internationaal B.V. v. Bundesamt für Finanzen (Cases C-283/94) [1996] ECR I-5063 the Court held that other member states, after discussion with the Council had adopted the same interpretation of the Directive as Germany and as there was no relevant case law of the Court it was held that the breach was not sufficiently serious."
i) The Second Directive does not itself deal with limitation, so that one is not in the territory of competing interpretations.
ii) The language of the Directive is not indicative of the right answer. It only looks at the question of adequate compensation.
iii) The Commission did not take this point against the MIB and the Secretary of State at the time that the Agreement was before the European Court in Evans.
iv) There is no guidance from any other Community institution.
v) Nobody raised this point on the Untraced Drivers Agreement when the Department was consulting prior to implementation of the Directive in the 1980s.
vi) It is now more than 18 years since the date for transposition of the Directive and yet this is the first case where it has been suggested that the United Kingdom has failed to transpose the Directive correctly in relation to minors, which is illustrative of the excusability of any breach.
vii) The principle of equivalence is elastic and does not require exact replication. Rather the Member State has an element of discretion.
viii) There are good reasons for imposing a shorter time limit where there is no defendant as is the case under the MIB procedure. This is relevant to deciding the seriousness of the breach.
ix) There is no suggestion of bad faith or intentional infliction of damage by the Department.
x) It is relevant to look at what other Member States have done. The department commissioned a Report from the British Institute of International and Comparative Law on how other Member States dealt with limitation in the context of claims by minors against insured drivers on the one hand and uninsured or untraced drivers on the other. In summary this showed a wide disparity as to general limitation periods and three other Member States, France, Greece and Luxembourg where the time limit for bringing a claim before the national body which has been designated to comply with the Second Directive is less than the general limitation period.